Resulting and Constructive Trusts Flashcards
How are resulting/constructive trusts different from typical trusts?
The beneficiary holds legal and equitable title and can demand immediate conveyance of the assets.
How does a resulting trust arise?
When then court implies a trust and declares that the settlor or his heirs to be the beneficiary
What happens when an express treat fails and the settlor has not declared her intent?
A resulting trust arises and the beneficial interest in the trust property is in the settlor - if she is dead, it passes to her successors
What happens when there is an incomplete disposition of property?
The property reverts to the settlor or her successors
What is a purchase money resulting trust?
A trust that arises when one party pays the purchase price for property and causes title to be taken in another’s name. If the parties are not related, there is a presumption that the paying party did not intend to make a gift, but rather for the grantee to hold the property in trust.
What is a constructive trust?
What is the constructive trustees sole duty?
Not a trust! It is a flexible equitable remedy imposed to prevent unjust enrichment as a result of fraud, undue influence, breach of fiduciary duty, mistake, etc.
To convey the property to the person who would have owned it but for the wrongful conduct.
What happens when a will makes a gift absolute on its face, and it alleged that the gift was made in reliance on recipient’s promise to hold the property for the benefit of another (a “secret trust”)?
What if the will expressly makes a gift in trust but does not name the beneficiary (“semi-secret trust”)?
Courts will allow the intended trust beneficiary to present extrinsic evidence of the agreement - if its proven by clear and convincing evidence, a constructive trust will be imposed.
VA courts will not impose a constructive trust; instead, a resulting trust arises in favor of the testator’s heirs.
